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Are American Technology Companies Too Big?

2019-7-24

Are big technology companies too big? Are they doing enough to protect users’ privacy?

Like Europe before it, the U.S. government seems ready to try to place limits on its technology giants. But doing so may be more difficult than it seems.

A 3-D printed Facebook logo is seen in front of displayed binary code in this illustratin, June 18, 2019. (REUTERS/Dado Ruvic/Illustration/File Photo)
A 3-D printed Facebook logo is seen in front of displayed binary code in this illustratin, June 18, 2019. (REUTERS/Dado Ruvic/Illustration/File Photo)

Department of Justice and FTC

This week, the U.S. Department of Justice, or DOJ opened an investigation of major technology companies following months of concern expressed in Congress and elsewhere.

The main question: Have tech companies hurt competition, slowed innovation or caused other harm?

The investigation, which could look at companies such as Apple, Google, Facebook and Amazon, will take into account “widespread concerns” about social media, search engines and online retail services.

Also this week, the U.S. Federal Trade Commission said that Facebook Inc. will pay a record-breaking $5 billion fine to settle a government investigation into its privacy practices.

The FTC said that Facebook’s data policy was deceptive to “tens of millions” of people. Under the settlement, Facebook’s leaders will create an independent privacy committee.

The FTC also reportedly plans to fine Google for the way it dealt with children’s information on YouTube.

Tech companies: criticisms and responses

Both liberal and conservative American politicians have criticized tech companies. Democratic presidential candidates, for example, have called for stricter rules and even breakups of the big tech companies.

Amazon CEO and founder Jeff Bezos says Amazon is small compared to other companies in international retail. In a recent letter to shareholders, he wrote, “There are much larger retailers in every country where we operate. And that’s largely because nearly 90% of retail remains offline, in brick and mortar stores.”

Facebook vice president and spokesman Nick Clegg criticized calls for breaking up the company. He said Facebook “accepts that with success comes accountability.” But he argued that the government should not break up companies to enforce accountability.

Difficult issue

The American technology industry developed without much government supervision, notes a paper published by Congressional Research Services or CRS.

American antitrust law could apply to the big technology companies. But, CRS notes, antitrust actions against them would raise complex legal issues. Big tech companies are difficult targets because U.S. antitrust law does not easily apply to companies offering low cost goods or free online services.

Traditional American antitrust law centers on large businesses that harm consumers through price-gouging and similar acts. Many tech companies offer free products. Some, such as Amazon, also offer low prices on many goods.

I’m Jill Robbins.

This story is based on reports by the Associated Press and Reuters. John Russell adapted it for Learning English. Ashley Thompson was the editor.

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Words in This Story

innovation – n. the act or process of introducing new ideas, devices, or methods

resolve – v. to find an answer or solution to (something) : to settle or solve (something)

deceptive -- adj. intended to make someone believe something that is not true

shareholder – n. someone who owns shares in a company or business

regulation – n. an official rule or law that says how something should be done

price-gouging – n. economics a term for when a seller increases the price of goods or services in an unreasonable or unfair way